Bitcoin Is A Veblen Good

In this video, we cover what exactly a Veblen good is and why Bitcoin is considered a Veblen good. With veblen goods, there is a direct relationship between price and demand. When the price goes up, demand for that product goes up too. This is because Veblen goods are luxury products meant to display exclusivity, wealth, and social status.

So, now the big question is how is bitcoin related to Veblen goods? Well, the short answer is that bitcoin is a Veblen good. During the first years of its inception, when bitcoin’s price was low, demand was also low. Barely anyone heard of bitcoin then and thought it was worthless, so no one was interested in buying it. But as the price of bitcoin climbed, people began noticing and its demand increased. The more bitcoin’s price increases, the more valuable an asset it becomes in the eyes of the market, and the more people want it.

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